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What You Should Know About Postal Reform Legislation

Today the Senate Homeland Security and Governmental Affairs Committee approved S. 1789, bi-partisan postal reform legislation, by a vote of 9 to 1, thereby clearing the bill for Senate floor consideration. Last month the House Committee approved its version of postal reform legislation. Our task now is to convince the leadership of both the Senate and the House to schedule these bills for floor action at the earliest possible date.

Below is a report on the status of our postal reform efforts.

• The need for postal reform legislation is real and urgent

o The United States Postal Service will lose $10 Billion this year and could run out of cash to meet payroll by September 2012 o Magazines need a viable Postal Service, with at least 90 percent of our copies delivered to our readers by USPS

• Excellent legislation is pending in both the House and Senate

o While Representative Issa’s bill (H.R. 2309) has some controversial elements, including a potential “control board”, the focus on downsizing and cost cutting is spot on o The bipartisan Senate bill (S. 1789), introduced by Sens. Lieberman, Collins, Carper, and Brown, does an admirable job of balancing all points of view while maintaining a similar focus on creating a smaller and more nimble Postal Service o MPA strongly supports both bills, in particular: - Giving USPS credit for pension overpayments and allowing the Service to use that money for retirement incentives to shrink its workforce from 565,000 employees to 425,000. - Allowing USPS to close post offices and processing plants and if necessary, go from 6 days of delivery to 5. - The bills even address the so-called “underwater classes” cost problem, and we have agreed with the constructive and balanced provision contained in both bills. o Neither bill contains troubling proposals made by other parties and strongly opposed by MPA. - A legislative rate increase greater than inflation as suggested by the Obama Administration. This would be counterproductive and lead to a death spiral for the Postal Service. - A change in the application of the CPI rate cap from the current mail class-by-mail class method. If the cap is not applied class by class, this could lead to devastating rate increases of 30% or more for the magazine industry, leading to many fewer magazines in the mail and much less value for consumers when they open their mailbox.

Key Messages for House and Senate Members

• Both the House and Senate bills have been approved by the appropriate Committees. The full House and Senate need to act on these individual bills as soon as possible. The ultimate goal is a blended bill that can pass both bodies quickly and be signed into law by the President.

• The budget deficit reduction “supercommittee” should not undertake postal reform. This complicated issue needs to be dealt with by the relevant authorizing committees who have the experience and expertise to craft long-lasting solutions.